All prices are going up, but apartment and house prices are starting to fall back. Interest rates on loans are getting higher and higher, so home sales are also suffering.
It is not the best time to buy a home, say economic analysts, and there are several arguments.
First of all, we are already talking about a declining demand, Romanians are thinking more, the data show. In recent months, housing sales have decreased slightly compared to the same period last year. And prices are also starting to catch up or even drop in some cities.
We see a decrease compared to the previous month, in Constanța by more than 3%, somewhat lower in Iasi and Brașov, and in Bucharest a stagnation. But compared to September of last year, prices are higher, even by 20% in Cluj-Napoca, if we talk about the prices asked by the sellers, according to imobiliare.ro.
The question is, however, what will happen in the next period. The International Monetary Fund estimates that due to rising interest rates and the economic situation, because we are expecting an economic crisis, house prices will fall by up to 25% in some countries. If we talk about Romania, we could talk about price drops between 10 and 30% in the coming years, says Dragoș Cabat, economic analyst, CFA Romania:
Dragoș Cabat, economic analyst, CFA Romania: “Very likely if there is an economic crisis on the horizon, the price of real estate, both residential and commercial, will fall and may fall somewhere between 10 and 30%. This is the order, the real estate market drops when the crisis starts, it is among the first economic sectors strongly affected by an economic crisis. So it’s a time to wait rather than buy a home.”
It’s a time when you’d rather wait, especially if you need a loan to pay off the home. Interest rates are rising during this period and seemingly small increases of 1.2 percent mean quite a lot to the rate.
Since October 1, the IRCC, i.e. the index based on which loans are calculated, has reached 4%. For a loan of 250,000 lei, the rate is approximately 1,500 lei. We already know that from January 1 the index will approach 6%, which means an increase of almost 300 lei per rate.
If there will be more interest rate increases, and we can expect them, and the IRCC reaches 8%, we are already talking about 700 lei more at the rate.
So, if you still decide to buy a home during this period, it is advisable to do such a calculation, even if the bank does not do it, and see if you can afford a higher rate. You can use online rate calculators, just enter the total interest and the amount borrowed.
Analysts say it’s good to wait even if you don’t need a loan, if you already have the money, or if you want to sell a house you already have and buy a new one, because the selling period is getting shorter bigger.
However, whatever time you make this decision to buy a new home, it’s good to keep a few things in mind.
What calculations to make before taking a loan from the bank
First of all, they say it’s good not to stretch out more than your duvet. There is also a formula: the house should cost about as much as the family’s income over 4 years. In other words, if the salaries are a total of 5,000 lei per month, i.e. one thousand euros, we multiply by 48 months and see that the value of the house should be approximately 48,000 euros. If the income is higher, of 10,000 lei per month, for example, then the house could also reach 100,000 euros.
If it is a loan, the rate should not exceed a quarter of the monthly income, to be safe, the advance should be as high as possible, and the amount borrowed as low as possible, AND it is good to see the building and the contract sales and specialists in the field, before signing.
But a decision like this, as I said, should be weighed twice in this economically difficult time.
Source: PROTV news
Tags: loans, robor, real estate, IRCC,
Publication date: 17-10-2022 09:48
Top fighters come to the OSS Fighters Gala in Constanța
Putin’s war also causes “victims” in Germany: a large part of society believes that Russia “should” have invaded Ukraine
Former KGB agent, on Russia’s nuclear threats: “Putin is not a suicide bomber, he wants to live”